Last week the Australian government announced a plan to introduce a carbon tax. It was proposed by the Multi-Party Climate Change Committee (MPCCC) and agreed by the Government and Greens members of the Committee. (Australia has a coalition government, with the Labor party supported by Greens and Independents who broadly support climate change legislation).
The bottom line is that there will be a carbon tax which will commence on July 1st 2012 aimed at the stationary energy sector, the transport sector, industrial processes sector, fugitive emissions (i.e. leaks) and emissions from non-legacy waste.
Initially set at a fixed price (yet to be announced) which will increase every year (again, no details), after 3-5 years the scheme will convert to a cap-and-trade emissions trading scheme. The start of the trading phase will depend on a number of factors, including the state of the international carbon market and the adoption of carbon pricing in other economies.
During the fixed price phase, international offsets will not be allowed to be used for compliance, but when the price becomes flexible offsets ‘meeting appropriate criteria concerning their quality’ will be possible.
One of the principles of tax is that it will be budget neutral, although how that will work has not been specified. Nor is it clear whether there will be any incentives or rewards for the adoption of low emissions technologies, something that was included in the UK’s CRC Energy Efficiency scheme.
Of course it’s all subject to being passed by both houses of Parliament this year, difficult enough for a coalition government even without the very vocal opposition in place in Australia
There’s a way to go yet and lots of details to fill in, but it does represent another potential brick in the international carbon containment wall. (Pseuds Corner?)
The implementation of another national scheme increases pressure on businesses, in Australia and internationally, to get their houses in order. In the case of Australia, in the first instance (as with the UK) it’s likely to drive the growth of carbon emissions management software (CEMS) solutions.
Hopefully Australian businesses will look further ahead than those in the UK and seek out longer term solutions, rather than short term fixes to satisfy the legislation. The market has, in any case, moved on and products increasingly cover energy and water as well as carbon, which may be particularly appropriate for the Australian market.
Either way, Australia will add to the CEMS market focus for the next couple of years.